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Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I operated a Limited Company period April 2011 to April

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I operated a Limited Company for a period April 2011 to April 2014. My accounts/tax returns and payroll were contracted to a company called Think Accounting. They had complete control of all the accounting issues including the wekkly payroll. They are now called New Wave accounting. I received a letter from HMRC stating that my Ltd company was a Managed Service Company and that as an MSC i was now responsible for approx £12,000. Think Accounting appealed this decision however HMRC has now responded stating that my Ltd company was a MSC. I was an HGV 1 driver working through an agency.I was the only employee of the Company I was never aware or told that my company was a MSC. Please can you advise if I am responsible for this payment
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
In essence you are BUT
can you advise
1) How it came about that you had to have a limited company - why were you not employed
2)How have HMRC stated the £12000 charge is made up - as I would have assumed all your income was drawn as salary so full taxed paid ? Please expand
Customer: replied 2 years ago.
I was a self employed HGV1 working for an agency for the same Haulage Company. I have been taken on full time (PAYE) by the said Haulage Company. I was advised by other drivers at the Haulage company to form a limited company and use the services of Think Accounting Ltd - now known as New Wave Accounting Ltd.
The amount due to the Revenue is made up of £7242.17 Class 1 NIC for the period from 6/4/2011 to 5/4/2014. and Income Tax for 2011/12 of £1356.60, 2012/13 of £1720.80 and £1865.20. This totals £12184.77.
Think Accounting had full control of all my accounting/payroll and relevant Revenue returns throughout the period. It was October/November 2015 that the HMRC started a Statutory review of C Bray Transport Ltd. After appeal by Think Accounting Ltd/New Wave Accounting Ltd the Revenue have said that my company was a Managed Service Company. I was never told by Think Accounting of the consequences of a MSCCraig
Hi Craig Thanks for your responsive and the additional information. Then did you not pay any tax or National Insurance at all? As you must have drawn a salary throughout this time? And the company must have suffered Class 1 National Insurance against your salary - please advise how you took money to pay your wages or was it made as a loan? And have Think Accounting (Now New Wave) taken any responsibility to cover the cost or partial cost of what HMRC are demanding? Thanks Sam
Customer: replied 2 years ago.
Think Accounting was in total control of the monies I received in my Bank account on a weekly basis. I was paid a small salary plus expenses and a Dividend for the year 2011/12. It then changed to small salary plus expenses and a payment to a Director's Loan Account. They deducted £23.94 plus Corporation Tax at a % of the Weekly sales every week before paying me.
Think Accounting never fully explain to me what a MSC was. Think Accounting produced all my accounts/payroll/year end documents. I am not Accountancy trained and believed my Company accounts/payroll deductions was in the hands of Think Accounting. At this moment in time Think Accounting have taken no resposibility for their actions.
Hi Thanks for your response (apologies for my delay I have been with clients) Thats where it all went wrong then - payment of more dividend than salary along with misuse of the Director Loan account.And payment of expenses. I am afraid unless you can prove that this company misled you or misaddressed you with their explanation of how they managed your affairs (so anything vai email or letter or through any signed agreement) then you will have a hard time proving to HMRC that you did not know that this was going to see you pay less tax than you should have. All I can suggest (even if you do not have this evidence) is that you appeal this amount on the basis that you had every reason to believe that this way of conducting business was appropriate, and that you feel the Think Accounting should be held responsibleHowever as they have clearly closed this business and reopened I would say this chance of appeal is very very slim and therefore do provide the new accounting name and address and perhaps the Director whom you had dealings with. But I will be honest you have very little chance of HMRC pursuing this company as you have had the benefit of being paid more money than you should, and its on that basis HMRC are pursuing for the lost money due, but I do urge you to take some legal advise as to whether you have any way you can personally bring a civil suit against this company or more importantly the person (that singular one person) that handled your affairs. I wish there was a straight forward way I could suggest that could wipe this £12K to NIL but based on what you advsie there is not one, mores the pity. Let me know if I can assist further -or please do rate me for the level of service I have provided. (or click accept) Thanks Sam
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Customer: replied 2 years ago.
Thanks Sam for your help. I will take your advice. I will appeal to the Revenue and write a strong letter to Think Accounting.